29 May, 2019

Europe would reject US plan to impose import quotas

The European Union would reject any push by US authorities to set quotas on the continent’s exports to the country.

Trade ministers met in Brussels to discuss the latest move in ongoing trade tensions between the two markets, following US President Donald Trump’s plans to curb imports in the belief that they pose ‘a threat to national security’.

The suggestion of quotas comes following Trump’s decision to delay the imposition of tariffs on European imports. However, it is not something the EU would consider.

‘That is something that we are 100% against,’ Swedish Trade Minister Ann Linde told reporters in Brussels, where she met her EU counterparts. Other national ministers and European Trade Commissioner Cecilia Malmström echoed the point by saying the 28-nation bloc is determined to respect WTO requirements.

Larger issues

Any tariffs placed on European exports would cause problems for carmakers based in the continent. German Chancellor Angela Merkel defended the country’s car industry to an audience of senior security officials in Munich earlier this year, calling the Trump administration’s suggestion that European cars are a threat to US security a ‘shock.’

‘We hope that the tariffs will not be put into practice at all,’ Linde added. ‘That is a really, really tough situation for the Swedish car industry and the European car industry. So that would be a catastrophe.’

At the same time, Malmström said the EU has a ‘very firm’ position against any ‘managed trade’ arrangement that would limit European exports to the American market in return for an exemption from the threatened levies on US cars and car parts.

National security

Last year, Trump declared American imports of steel and aluminium a threat to national security and imposed levies of 25% and 10%, respectively, on shipments from around the world, including the EU. That prompted the bloc to retaliate with a 25% tariff on €2.8 billion of American goods including Harley Davidson motorcycles, Levi Strauss jeans and bourbon whiskey.

‘Imports of cars and auto parts from the EU clearly do not pose a national security risk to the United States,’ stated ACEA Secretary General, Erik Jonnaert. ‘Any trade restrictive measures in our sector will have a serious negative impact, not only on EU manufacturers but also on US manufacturers.’

A 25% US levy on foreign cars would add €10,000 to the price of EU vehicles imported into the country, according to the European Commission.

The EU plans to hit as much as €20 billion of US goods with tariffs should Trump impose duties on European cars and parts, Jean-Luc Demarty, the commission's outgoing director general for trade, said in late January.